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EUR 1.4 million deposit as security for damages was not increased

November 2010 - Finance. Legal Developments by Norrbom Vinding Law Firm, member of ius laboris.

More articles by this firm.

If a company defending an injunction application requests a higher amount as security than that fixed by the enforcement court, it is a matter for the High Court. This principle was recently established by the Copenhagen Maritime and Commercial Court.

An injunction from the enforcement court is an interim remedy available to patent holders in Denmark if a competitor is marketing an infringing product. The court may decide to make the injunction conditional on security for damages being provided by the applicant to safeguard the respondent's rights if the injunction is held to be unjustified in the subsequent case on the merits. In this case, the parties disagreed over the amount of such security.   In 2008, a Danish manufacturer of heating and cooling systems applied for and was granted an interim injunction against a competitor. As a result, the competitor was barred from producing or selling a particular valve that infringed the applicant's patent.  

A matter for the High Court
In the subsequent case on the merits, the Copenhagen Maritime and Commercial Court was to consider whether the injunction was justified. The competitor started out by asking the Court to require the patent holder to increase the amount of security it had been ordered by the enforcement court to provide. In the competitor's view, a sum of about EUR 1.4 million was not enough to cover the damage inflicted by the injunction.   But the Court did not wish to consider this issue, ruling that only the enforcement court can decide the amount of security to be provided by applicants. And if the parties disagree with the order on security, an appeal can only be lodged with the High Court.

Norrbom Vinding notes:

  • that the Copenhagen Maritime and Commercial Court's ruling means that defendants in injunction proceedings should make sure to appeal the enforcement court's order on security if they believe the amount is insufficient to cover the anticipated loss; and
  • that defendants do not have to appeal the whole case to the High Court if they disagree with the order on security; they can simply appeal the order on security.